MakerDAO introduced new upgraded versions of its DAI stablecoin and the MKR governance token, called NewStable (NST) and NewGovToken (NGT), respectively.

Endgame introduces NewStable and NewGovToken, the upgraded versions of DAI and MKR.

However, DAI and MKR will remain available. Both tokens are expected to stay unchanged for the foreseeable future, unless governance decides otherwise.

You can continue to hold and use… pic.twitter.com/ucB6s8qsqF

— Maker (@MakerDAO) August 22, 2024

According to the Aug. 22 announcement, upgrading to the new tokens is optional, and they will not make DAI and MKR obsolete — both will continue to be available as before unless the protocol’s governance decides otherwise.

Users will be able to swap DAI for the new NST token 1:1 and will maintain the ability to revert their holdings to DAI anytime. Additionally, Maker explained that DAI will focus on crypto-native use cases, while NST is targeted at mass adoption.

Meanwhile, the swap between MKR and NGT will happen at a ratio of 1:24,000, which means that one MKR token will be equivalent to 24,000 NGT. The weight disparity is intended to promote broader engagement in governance. The announcement added:

“It allows more users to hold a significant number of NewGovToken and actively influence the future of the ecosystem.”

The announcement did not disclose dates for the upgrade.

Push For Mass Adoption

MakerDAO co-founder Rune Christensen first proposed the concept of a new version of the DAI stablecoin on May 15. 

In a blog post, Christensen explained that DAI is “straddling two worlds”— one marked by the culture of pure decentralization and the other aimed at fulfilling its original purpose, which is delivering utility and value to real people at scale.

He added that the two worlds are incompatible with each other. According to Christensen:

“Unfortunately these two worlds are fundamentally in friction with each other, as noted by the Stablecoin Trilemma, which states that achieving a dollar peg, maintaining pure decentralization, and scaling to large sizes simultaneously is not feasible.”

To overcome this issue, NewStable intends to focus on mass market adoption and on regulatorily-compliant Real-World Asset (RWA) backing. 

To fulfill its purpose of regulatory compliance, NewStable will have an upgrade mechanism to introduce a freeze function, which will follow the rules of law in jurisdictions where Maker needs a high level of regulatory certainty.

However, the implementation of this function will be decided by the project’s governance and won’t be available at NST’s launch.

Despite remaining active after NST’s implementation, DAI will start losing its yield offering, as NewStable will be the only stablecoin in MakerDAO’s ecosystem with value-accruing capabilities.

Endgame

The NST and NGT tokens are part of MakerDAO’s “Endgame,” and these labels will be replaced as soon as the protocol executes its rebranding.

According to Maker’s documentation, the Endgame plan is a comprehensive proposal aimed at enhancing the governance and tokenomics of the MakerDAO ecosystem, leading it to a stable and resilient state where the ecosystem is self-sustainable, with minimal changes to its core components.

Along with the tokenomics changes, the plan’s core components also include the introduction of sub-decentralized autonomous organizations to handle specific matters, broad focus areas, and groups of aligned voters focused on high-level governance decisions.